Thai property firms guard cash over assets as buyers pull back

Thailand’s property sector is shifting into cash-preservation mode as developers slow new investment, manage unsold stock and brace for a deeper demand problem: consumers who are choosing not to buy homes at all.

Data from the Real Estate Information Center (REIC) showed a clear pullback in new investment during the first quarter. The number of housing units granted land allocation licences nationwide fell to 5,783 units, down 45.7% from the same period last year. Construction permits dropped 50.2% to 27,870 units.

Condominiums were the hardest hit. The number of condo units receiving construction permits fell 71.3%, reflecting a broad decision by developers to delay new high-rise projects and focus instead on managing existing stock.

While the REIC figures point to a sharp contraction in supply, demand has not completely stalled. Housing transfers nationwide still rose 11.2%, while new housing loans increased 11.1%.

Most of the growth, however, came from homes priced below 3 million baht, a real-demand segment that continues to face high mortgage rejection rates. At the upper end of the market, homes priced from 7.51 million baht upwards showed signs of slowing, with transfer units down 14.9% and transfer value down 16.4%. This has pushed many developers to delay investment as well.

Developers slow launches as risks mount

Surachet Kongcheep, head of research and consulting at Cushman & Wakefield Thailand, said the Thai property market was under heavy pressure from fragile purchasing power, high financial costs and prolonged economic uncertainty.

He said the residential market in 2026 and 2027 was unlikely to return to a lively cycle or reach a point where all developers could deliver strong earnings.

“New condominium launches this year are expected at around 17,000 to 20,000 units, but we need to watch the market direction in the second half,” Surachet said.

“If negative factors, especially the Middle East conflict, do not improve, long-term confidence could weaken. Thai buyers may spend less, while developers will have to reduce new project launches. New condo launches may end up at around 17,000 units.”

He said houses priced above 30 million baht per unit could still find buyers and continue selling gradually. Homes and condominiums priced below 5 million baht, however, may face serious mortgage difficulties, which could affect cash flow for some developers.

Cash becomes more valuable than assets

Issara Boonyoung, honorary president of the Housing Business Association, said projects that have passed environmental impact assessment, or EIA, are normally considered valuable assets because developers have already invested significant time and capital to reach that stage.

However, many companies are now selling these assets as part of portfolio management to generate liquidity in line with economic conditions, rather than because they lack development capability.

Listed and non-listed developers have gradually restructured their investment portfolios by selling land, selling projects or seeking joint-venture partners to share investment burdens.

Several firms have adjusted portfolios covering condominiums, hotels and other assets. The trend shows that cash has become more valuable than holding assets in the current environment.

The fall of about 50% in land allocation licences and construction permits also reflects a deliberate pause in new launches. Developers are reluctant to add risk when purchasing power has not fully recovered.

Instead of rushing to invest, many are waiting for the right timing. Controlling supply has become a key strategy to prevent oversupply and protect cash-flow balance.

Volatility demands flexible business plans

Asst Prof Dr Kessara Thanyalakpark, managing director of Sena Development Plc, said Thailand was facing a “losing ground” problem, with the country losing competitiveness after years of low economic growth while neighbouring countries moved faster to develop and attract investment.

She said the key challenge was not just short-term economic stimulus, but structural reform, a clearer national strategy and stronger private-sector confidence to support a new and sustainable investment cycle.

Business risks no longer come only from the economy. Companies now face climate change, geopolitical conflict, energy costs and global supply-chain volatility at the same time.

In this environment, the ability to adapt has become a more important measure of corporate success than traditional long-term planning. The businesses best able to manage uncertainty are the ones most likely to remain in the market.

‘Self-rejection’ emerges as a new risk

Kessara said the issue now more worrying than mortgage rejection by banks was “self-rejection”, where consumers decide not to buy a home even though they may have borrowing capacity because they are uncertain about future income and the economy.

“This crisis is more complicated than Covid-19. Back then, everyone knew the cause and could see a way out through vaccines. Today, negative factors are happening on many fronts at the same time, making it difficult to identify which factor is truly dragging down purchasing power,” she said.

“The result is a housing market slowing because consumers have become more cautious, not only because of credit problems.”

Changing consumer behaviour is forcing developers to rethink their business models. Sena has developed a rent-to-own concept to give people who are not yet ready to take on long-term debt a route to home ownership.

The generation rent trend, where people choose to rent rather than buy, is becoming clearer, especially among younger consumers. At the same time, Thailand’s ageing society and shrinking population mean the property market may not return to the heated growth seen seven to eight years ago.

‘Boiled frog’ pressure weighs on the economy

Uthai Uthaisangsuk, president of Sansiri Plc, said Thailand’s property market in the second half of 2026 was likely to remain little changed from the first half.

Although exports and tourism have started to recover, the improvement is not strong enough to offset the impact of low economic growth. The government has estimated that GDP growth this year may be below 2%.

Geopolitical conflict, especially in the Middle East, continues to pressure construction costs, transport costs and business operating expenses.

Developers therefore need to proceed more cautiously. Sansiri is focusing on cash-flow management, cost control, stock management and new launches only in locations with real demand, rather than rushing to expand.

Uthai compared the current situation to a “boiled frog” crisis. It is not a sudden shock, but a gradual build-up of pressure from years of low economic growth that has clearly weakened public purchasing power.

As a result, some developers can no longer carry rising costs and liquidity pressure, forcing them to gradually exit the market. Larger players with stronger financial positions have a better chance of preserving market share.

Low-cost measures with high economic impact

Sunthorn Sathaporn, president of the Housing Business Association, said the Cabinet’s decision to extend the reduction of transfer and mortgage registration fees to 0.01% until 30 June 2027 would create strong economic returns.

He said the measure directly reduces homebuying costs and encourages buyers who had delayed transfers to move ahead.

The Bank of Thailand had earlier relaxed loan-to-value, or LTV, controls to make it easier for people to access credit. The relaxation, which had been due to expire on 30 June 2026, has been extended to 30 June 2027.

When combined with lower transfer and mortgage registration fees, homebuying costs are reduced both in terms of borrowing and expenses on the transfer date.

Sunthorn said the property sector accounts for 7-8% of Thailand’s GDP and has a strong multiplier effect. Every home transaction creates further economic activity across hundreds of related businesses, from construction materials, steel, cement, sanitary ware, furniture, electrical appliances and logistics to design and interior decoration.

Stimulating the housing market, he said, therefore means stimulating the wider economic chain.

Source: Bangkokbiznews